The COVID-19 pandemic suddenly unleashed two major shifts on organizations across the globe – mandated remote work and a surge in online buying and digital interactions with customers. These changing dynamics caught many organizations unprepared. Astute organizations fortified their virtual software engineering capabilities and focused on robust data-driven approaches and more customer-centric software products.
Across industries, different strategic pathways emerged. Banks, for example, now must focus their engagement efforts almost exclusively on digital, prioritizing the need to deliver newer and better multichannel experiences. Insurers, meanwhile, need to leverage technologies such as artificial intelligence (AI) and data analytics to prepare better for future black swan events.
In this emerging landscape, software has become front and center for virtually every enterprise’s go-forward strategy. The pandemic showed that organizations that were well along in their digital journeys were able to pivot faster, thereby containing the initial shockwaves. While the crisis has caused near-term business disruption, clear hotspots for innovation have emerged that modern software engineering can better address, such as enhancing operational efficiencies and improving decision making. These include moving more offline processes online, leveraging AI to boost process effectiveness, and revamping the customer experience. Software is the glue that binds all this together.
Our 2019 global software engineering study found that while organizations recognized the value of this critical capability, progress has been slow. But that has likely changed now. The pandemic elevated the need for companies across industries to become more software-centric. Businesses now find themselves in the middle of heightened digital competition as face-to-face customer interactions dwindle.
Businesses with strong software engineering capabilities stand to gain an advantage compared with those just getting started or midway through their plans. However, this is not easily or quickly achieved. Technologies, processes and, above all, a culture that enables companies to stay ahead of customer expectations will be key. As they navigate the crisis, we recommend the following steps to help reimagine software engineering.
Organizations need to create foundational strengths by adapting their software development processes to more flexible and automated ways of working — essentially by embracing modern coding methodologies. This begins by adopting a software product engineering mindset. This seemingly small shift in thought process, however, requires a customer-focused, outcome-oriented approach, which is easier said than done.
Importantly, businesses must do this while navigating the uncertainties of whatever COVID-19 — or other black swan events — brings moving forward. We believe companies need to not only adopt the technology and processes that drive this change, but also foster an open and anticipatory culture of understanding and addressing customer needs before they are even revealed verbally or otherwise.
In practice, these needs can be supported through Agile and DevOps practices, as well as new automation and cloud-based application development tools. We experienced first-hand the benefits this approach brings when we helped a leading European communications service cut its operational expenses 20%, thus reducing the total cost of ownership.
Digital tools that help extract value from data are more important than ever today. But the efficacy of the insights from these tools depends entirely on how they are put to use. We believe data modernization is an essential step in this direction. In a study we conducted last year with Forrester, we found that organizations’ top data-driven initiatives focused on modernizing their data infrastructure. These included recruiting more people with advanced data skills; providing data preparation tools for data management for end users; and establishing new data privacy and security processes and tools.
Such initiatives lay the technology foundation for organizations to build capabilities in areas such as the Internet of Things (IoT) and AI, where software innovation can thrive. Business leaders should champion data initiatives that catalyze organizational change while ensuring that the right technologies are in place.
This would require generating buy-in, especially from leadership across the organization. When asked whose buy-in was critical for software engineering success, our pre-COVID study found that 58% believed it was IT leadership, while 53% said top leadership. We believe this is critical given the enormity of the data modernization task ahead. Addressing issues related to legacy systems and processes while extracting more value from existing and emerging data — a need accentuated by the COVID crisis —requires a data-driven leadership.
In the post-COVID-19 world, cloud strategies must balance cost savings and operational flexibility with an unlocking of innovation at scale to deliver the top- and bottom-line boost business needs in these challenging times. This means overcoming the obstacles that have long thwarted organizations’ software engineering efforts. Our study found that management and tracking of cloud assets (57%), lack of a unified view of cloud environment (52%), and optimizing IT capacity (52%) were the biggest cloud management challenges. COVID-19 has added to these complexities with application development workloads moving at an unprecedented rate to the cloud.
In this scenario, organizations with different levels of cloud maturity have little choice but to address these complexities head-on. They can do this by first understanding the dependencies among their applications. We believe they can then begin migrating applications to the cloud in an industrialized manner. Segmenting planning, execution and optimization phases into strictly defined individual scrum processes can expedite the migration.
In our experience helping clients migrate their work to the cloud, we’ve found as much as an 80% reduction in application development cycles. By turning cloud migration into a routine, streamlined activity, businesses can gain much needed visibility into their cloud environment. Importantly, it will allow them to plan launches in a smooth and effective manner through improved workflows and access to resources.
As work goes remote during the pandemic, so does collaboration. Pods, which are a popular collaborative approach in software development, are small teams consisting of cross-functional talent formed to keep the customer at the center of software development. In our study, 88% of respondents agreed that a pod-based approach is the way to go for software engineering. This collaboration model has inevitably gone virtual.
Virtual pods allow businesses access to talent from anywhere, thereby addressing any talent shortages they might be facing. The figure below illustrates the typical composition of a virtual pod.
With remote working here to stay, it’s critical for businesses to adapt their engagement practices to an online-only environment. Apart from the digital tools necessary for collaboration, these teams must operate within a culture that encourages ideation, prototyping, coding, and testing of new ideas. Remotopia, as we call it, requires leaders to recognize employees as their biggest strength and target not just higher productivity but also building trust.
This also means enabling a sense of community and seamless communication, as well as identifying and communicating key performance indicators based on the business impact of the software teams.
Understanding customer needs in the digital era is a never-ending process — and is more critical in a socially distanced and virtual world where interpreting paralinguistic cues can be difficult without a good deal of Code Halo-thinking. A human-centric approach allows the streamlining of systems around the customer so that a virtuous digital feedback loop along touchpoints across the customer journey can surface into transactional and interactional behaviors. In our software engineering study, we found that many businesses are leaning on behavioral science, big data modeling of customer interactions, and (to a lesser extent) predictive AI to anticipate customer needs.
For software developers, this translates into working closely with the product owners and using Agile methodologies to create minimum viable products that can then be quickly deployed and tracked. Once a product is deployed, developers must make quick course corrections whenever necessary. To maintain the cadence of feedback and response in a virtual workplace, businesses need to not only provide the necessary technology, but cultivate a mindset that encourages idea sharing and prioritizes the well-being of all team members.
Transitioning to a digital present requires a culture that embraces and complements today’s new digital reality. Businesses need to explore new ways to boost innovation while maintaining high levels of motivation and collaboration within their ranks. This requires revisiting everything from team structures and talent acquisition, to how the organization views the contribution of software engineering to its growth. Specifically, a software-centric element needs to be added to overall cultural change efforts. This means allowing a “fail-fast, learn-fast” mindset to flourish across the organization. Organizations that focus on culture during transformation have been shown to achieve more breakthroughs than those that don’t. In a post-COVID world, such gains can be invaluable.
The pandemic has forever altered our world, testing the ability of businesses to adapt unlike any challenge in recent memory. While uncertainties loom over how things will play out, organizations can give themselves the best chance of success by staying alert to new opportunities that come their way.
For more, read “Becoming a Software-Centric Business: Best Path Forward in an Uncertain Post-COVID-19 World”, visit the Software Product Engineering section of our website, or contact us.